German CGT Plans Slammed As 'Absurd'

by Philip Morton, Investors Offshore

02 December 2002

German fund management companies last week condemned Chancellor Gerhard Schoeder's plans to extend the 15% capital gains tax to all securities transactions as 'absurd', warning that the plans would create a 'bureaucratic monster'.

Speaking at a recent press conference, spokesman for the BVI Association of investment funds, Axel-Guenter Benkner explained that the proposed capital gains tax extension, coupled with new obligations to report to the tax authorities will seriously damage the country's credibility as an international finance centre:

'We're confident that, given how absurd it is, the tax plan will be changed. We assume the government will show goodwill because the issue is so clear,' he told reporters, continuing:

'If this law comes into being, German investment funds will no longer be competitive outside Germany. All the bureaucratic costs resulting from it will make it impossible to sell our funds abroad.'

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